3B black bio business was already growing at 35% CAGR pre covid. Its not a commodity like graphite electrode and having margin of more than 60%.
Though corona testing is not going to stop suddenly, but if we assume sudden drop in testing, They have earned enough cash which would help in accelerate growth in other kit business through R&D, marketing and established relationships
They have also left good image of product quality on new customers which will further boost brand value & growth for other kits due to proven track record.
World has accepted RT PCR technology as gold standard due to corona so there is little doubt of growth hinderance in future.
The biggest positive for me in kilpest is promoters seems honest and timely disclose everything so corporate governance is a big plus.
Their agri business is also turning around.
Management is already declared demerger of 3B blackbio which will unlock massive value. Other companies in this segment is trading at around 10 times of revenue which indicates how much value is left to grab.
For vaccine, even if it would be available in next 3 months, then too it will take long time to reach everyone and “keep testing” is only solution to stop fast virus spread as lockdown can not be done for long time. After that they can explore the export market in countries which is not vaccinated as whole world can not be vaccinated at once. So more or less 2 year story of covid kits would still left to fully play out.
Negatives: If testing stops, stock may consolidate here for 3 to 5 years which depends on their formal business growth.
Disc: invested